The UK's 'Green Industrial Revolution' to reach net zero is facing a crucial moment of transition. As countries around the world are acting to encourage investment, develop new technologies, and evolve their workforce to secure a just transition that captures the benefits of net zero as "the economic opportunity of the 21st century" (Skidmore, 2023), the UK is stalling (Reference, 2023). This essay explores how the dominant neoclassical paradigm of market failure in the green job economy negatively portrays the role of the state as "market fixer".
This role is limited to fixing, or at best facilitating, the provision of public goods or market mechanisms (Sekera, 2020) to correct the supply and demand issues of green skills and achieve an ever-romanticised 'equilibrium', rather than shape the growth of employment in an entirely new industrial sector over the long term.
By identifying, describing, and contrasting market fixing and market shaping interventions in the green job economy, this essay will argue how each is supported by the appropriate rationale and demonstrate the far-reaching impacts each has on green job policy in the UK.
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In 2020, the UK government published the 'Green Industrial Revolution', a ten-point £12 billion plan aimed at getting the UK back on track to meet its net zero target by 2050, starting to take steps to unlock the potential of a green transition, and preparing a future workforce (UK Gov, 2020).
A net-zero strategy – detailing policies and proposals for decarbonising all sectors of the UK economy – followed shortly after in 2021 and, in doing so, articulated a clear ambition to support 2 million green jobs by 2030, "setting the direction for the job market" (UK Gov, 2021).
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Alongside these ambitions to deliver a fair transition while achieving net-zero, the UK’s £13 billion ‘Levelling Up’ project, launched in 2022, is an additional investment aiming "to reduce regional, social, and infrastructure inequality across the UK" (UK Gov, 2022).
While the UK is taking steps to achieve net-zero by 2050 through strategies and investments focused on securing a just transition, its policies are seen as "piecemeal, limited, or absent altogether" (Emden, Evans, and Murphy, 2023), especially when compared to green industrial strategies like the United States' $369 billion investment into clean technology through the Inflation Reduction Act (IRA). The US strategy explicitly links low-carbon policies with economic aims such as job creation, fair pay, education, and childcare with a clear long-term objective.
This is highlighted in a recent independent review of the government's approach to delivering its net-zero targets. The review found a resounding sense of frustration from stakeholders across sectors, citing “a lack of long-term thinking, siloed behaviour from government departments, and uncertainty over the length of funding commitments" (Skidmore, 2023).
The UK government has since responded to this review, agreeing that "decisive action is needed" (HM Government, 2023), although it is still unclear what actions have been taken.
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Around the world, only 1 in 8 workers has one or more green skills—we are far from the green skills penetration that we need.
This is especially prevalent when focusing on a just transition to an equitable green job economy, with a 2023 LinkedIn ‘Global Green Skills Report’ showing that despite the rise in the number of green jobs, only one in eight workers possess more than one 'green skill' (LinkedIn, 2023).
The Place-based Climate Action Network's Just Transition Jobs Tracker argues that "one in five jobs in the UK (approximately 6.3 million workers) will require skills that may experience demand growth (approximately 10% of UK jobs) or reduction (approximately 10%) as a result of the transition to net zero" (Robins et al., 2020).
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Fundamentally, while the UK is taking steps to capture the economic benefits of net zero through strategies and investments, it’s policies do not consider the ‘nature’ of how these benefits are being captured – they simply look to achieve growth by balancing the supply and demand of green jobs as a resource.
This is especially prominent when compared to green industrial strategies like the United States' $369 billion investment into clean technology through the Inflation Reduction Act (IRA), a strategy that explicitly links low-carbon policies with socio-economic aims such as job creation, fair pay and education with a clear long-term objective, achieving what the UK has yet to demonstrate and support a just transition to an equitable green job economy.
https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/
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